Field Notes ยท
Related-party balances that trip Taiwan audits
Why related-party disclosures and supporting agreements need early attention in financial statement audits.
Related-party transactions are not inherently improper. Undocumented ones are what slow audits.
Start with a complete map
List entities under common control, key management, and family-owned affiliates that trade with the company. Incomplete maps force auditors to rediscover relationships through bank statements and shipping records.
Match contracts to ledger trails
Transfer pricing memos, loan agreements, and guarantee letters should sit beside the balances they explain. Oral understandings between siblings who co-own companies do not read well in a working paper.
Disclose early in draft statements
Waiting until the final week to draft related-party notes guarantees last-minute edits. Build the note while the trial balance is still flexible.